Private Equity Landscape in India May 6, 2008
Contents PE Investment in India Comparison with other emerging markets Funds raised in India Investment by sector Investment by stage
Buyout deals Significant PE Investments PE Exits India-Europe M&A Activity – Inbound and Outbound India–Italy M&A Activity
Page 2
Private Equity in India – Growth over the years $18,000 $16,151
Excluding PIPE deals the total PE investments amounted to $11.7bn for 2007 which is nearly double of $5.9bn for 2006
$16,000 $14,000
US $ Million
$12,000
Average deal size was $43m for YTD 2007 as against $25m for 2006
$10,000 $7,460
$8,000
Excluding PIPE deals the average deal size was $31m for 2007 as against $25m for 2006
$6,000 $4,000 $2,000
$1,800 $1,500
$1,750
$2,300
$774
$0 2001
2002
2003
2004
2005
2006
2007
Currency = USD million Source : IVCA ( upto 2002 ) , Venture Intelligence, AVCJ , TSJ Media & Industry Source: An Indispensable Guide to Equity Investment in India, Evalueserve, September 2007
Page 3
Total deals were 375 in 2007 as against 302 in 2006
PE Investments – Indian Market vs. Other emerging Markets $
2006*
2007
%Change
Australia
$
16507.32
14610.99
89%
China
$
10305.85
10873.67
106%
India
$
7416.46
18278.84
246%
Indonesia
$
713.95
517.09
72%
Japan
$
11505.28
14708.03
128%
Korea
$
1886.13
4458.74
236%
New Zealand
$
2955.52
2733.05
92%
Singapore
$
2076.62
5347.87
258%
Taiwan
$
4000.88
4932.04
123%
Thailand
$
3879.25
376.61
10%
Total (Includes other Asia Pac Countries)
$
61247.25
76836.93
125%
Investment Breakdown Country-wise — 2007 Amt invested (USD Million)
No. of Deals
India
$
18278.84
352
Japan
$
14708.03
366
Australia
$
14610.99
148
China
$
10873.67
438
Malaysia
$
5442.74
26
Singapore
$
5347.87
43
Taiwan
$
4932.04
38
Hong Kong
$
2866.32
45
New Zealand
$
2733.05
54
Vietnam
$
683.50
57
Indonesia
$
517.09
8
Thailand
$
376.61
13
Source : AVCJ, * Restated, Currency = USD millions
The bullish industry story is also reflected in the heightened interest shown by Global Private Equity majors. Source: Asian Venture Capital Journal-Asia e-letters
Page 4
Highlights of PE Investments in India vs. Other Emerging Markets Investment Breakdown Country-wise — 2006 Amt invested
No. of Deals
Investment Breakdown Country-wise — 2007 Amt invested
No.of Deals
Australia
$
16507.32
106
Australia
$
14610.99
148
Japan
$
11505.28
277
India
$
18278.84
352
China
$
10305.85
332
Japan
$
14708.03
366
India
$
7416.46
321
China
$
10873.67
438
•
•
•
From occupying the fourth position in terms of deal volume in 2006, India became second in the period January–August 2007 In the third quarter of 2007, India outpaced Australia, which hitherto had garnered maximum PE investments in terms of deal volume Temasek’s USD 2 billion investment in Bharti Airtel is the top investment in Asia for Q307.
Source: Asian Venture Capital Journal-Asia and India e-letters
Page 5
Investment Breakdown Country-wise in Q407 Amt invested (USD million) India
$
6,389
Australia
$
3,371
China
$
2,701
Taiwan
$
393
PE Investment Trends Funds raised 7000
5,914
6000
4,895
USD million
5000
4000
3000
2,613
2000
776
1000 260 0 2003
2004
2005
2006
2007
Some of the very large funds being raised are infrastructure sector funds Only nine out of the 64 funds known to be raising capital for Indian investment are categorized as buyout-focused Source : AVCJ Research, upto 30 September 2007
Page 6
PE Investments in India – On a Growth Path Funds raised in India as a % of Funds raised in Asia Currency: USD million 11.6%
60000
11.8%
50000 40000
80000 70000 60000 50000 40000 30000 20000 10000 0
11.1%
30000
6.8%
20000 10000
India investments as a % of Asia Investments Currency: USD million
7.8%
0 2003
2004
Funds Raised in Asia
2005
2006
2007
Funds Raised in India
11.7%
5%
2003
8.1%
2004
Asia Investments
20.4%
6.5%
2005
2006
Q1-Q3 2007
India Investments
Funds raised for India as a percentage of funds raised for Asia has been rising, highlighting increasing attractiveness of India as an investment destination PE Investments in India as a percentage of investments in Asia have also been on the rise. India has been on top among the other Emerging markets in terms of PE investments during 2007 Source: An Indispensable Guide to Equity Investment in India, Evalueserve, September 2007; AVCJ
Page 7
Private Equity Funds Pouring in India Funds Launched or Announced in 2007 PE Firm
Fund Size
Target Sector(s)
Citigroup and Blackstone
USD 5 billion
Infrastructure
ICICI Bank
USD 2 billion
Infrastructure
Chrys Capital
USD 1.25 billion
Infrastructure, Technology, Pharmaceuticals, and Financial services
3i Capital
USD 1 billion
Infrastructure
Actis Advisors
USD 1 billion
Generic
IL&FS Investment Managers (IIML)
USD 1 billion
Real Estate
Baring Private Equity Partners
USD 400–500 million
Generic
Fire Capital
USD 500 million
Real Estate
Sequoia Capital India
USD 500 million USD 300 million
Growth Capital Venture Capital
Source: Factiva
Page 8
Private Equity Funds Pouring in India (Cont’d.) Funds Launched or Announced in 2007 PE Firm
Fund Size
Target Sector(s)
Parag Saxena (Leading Venture Capitalist)
USD 1.5 billion
Asia Fund with special focus on India
Sabre Capital
USD 1 billion
Generic
Baer Capital
USD 1 billion (consisting of five funds)
Infrastructure, Special Situations and Generic
Ripplewood Holdings
USD 1 billion
Indian Securities
Peepul Capital (Formerly iLabs Management)
USD 215 million
Manufacturing and Logistics
Dawnay Day
USD 200 million
Generic
NEA-Indo US Ventures
USD 189 million
Generic
Ventureast Funds
USD 150 million
Life Sciences and Information Technology (IT)
Nexus India
USD 100 million
Venture Capital
Source: Factiva
Page 9
PE Funds Launched by Other Institutions Funds Launched or Announced in 2007 Institution
Fund Size
Target Sector(s)
DLF
USD 8 billion (3 funds)
Infrastructure and Real Estate
Yes Bank
USD 1.5 billion (4 funds)
Infrastructure, Real Estate, Special Situations
Macquarie Bank and IFC
USD 1 billion
Infrastructure
Power Finance Corporation
USD 1 billion
Power
HSBC Bank
USD 600 million
Real Estate
Louis Vuitton
USD 500–600 million
Retail
Piramal Enterprises
USD 200 million
Healthcare
Burill & Company
USD 200 million
Life Science
The Small Industries Development Bank of India (SIDBI)
INR 1 billion (USD 22.6 million*)
Small- and medium-sized companies
This fund raising Indicates heightened PE activity in India Source: Factiva; Oanda Website *Wednesday, 28 February 2007 (INR 1 = USD 0.02263)
Page 10
India – An Attractive Investment Destination Looking at the attractive investment opportunities in India, PE players the world over are planning to enter India and increase their allocations to participate in the growth story Fund management group Schroders is in talks with a number of possible partners about setting up a venture in India. Schroders' Indian operation will offer a range of funds targeting domestic investors, offshore funds and discretionary fund-management accounts Cerberus Capital, a New York-based private equity (PE) fund is entering the Indian market shortly Kohlberg Kravis Roberts, another major PE fund, is looking at investments in India Ripplewood Holdings, a US-based private equity firm is planning to enter India through a USD 1 billion big-ticket fund Private equity firm Berggruen Holdings Inc has plans to invest USD 300 million in India over the next two years US-based Bessemer Venture Partners has earmarked USD 350 million for Indian investments, especially in companies that cash in on the rise of consumer spending, infrastructure development and intellectual property-based opportunities Source: Factiva
Page 11
PE Investments in 2006 – Trends in Sectors Percentage Contribution of Sectors to number of deals and Value of deals 1,600
100
V-19.7% D-28.8%
V-18% D-1.3%
Value in USD million
1,400
90 80
1,200 V-13% D-18.2%
1,000
70
V-12.8% D-10.3%
60
800 V-6.9% D-9.6%
600
50
V-8% D-7.6%
400
40
V-2.9% D-4.6%
200 0
Energy
Ret ail
Telecom
Ot hers
599
220
143
210
295
377
125
1,344
258
23
14
13
10
9
8
6
4
13
515 29
1,470
962
Deals
87
55
0 M &E
31
Value
20 10
Text iles
956
BFSI
V-1.7% D-2%
Shipping & Logist ic
Engg. & Const ru ct ion
M anuf ac t uring
V-2.8% D-3.3%
30 V-3.5% D-4.3%
Food & B ev.
Lif e Sciences
IT & ITES
V-1.9% D-4.3%
V-4% D-3%
V-5% D-2.6%
IT&ITES was the most favored sector by investors, reflected by the highest percentage contribution both in terms of number of deals and value Though Telecom contributed to only 1% to the number of deals its share was 18% in terms of value and this was contributed by only four deals, the biggest being the Idea Cellular Pre- IPO deal of USD 966 million Source : Venture Intelligence
Page 12
PE Investments in 2007 – Trends in Sectors Percentage Contribution of Sectors to number of deals and Value of deals
5,000
V-25.83% D-14.93%
4,000
V-20.94% D-2.13% V-9.80% D-7.47%
3,000 2,000
V-7.71% D-23.47%
V-9.94% D-13.87%
V-2.20% D-2.40%
V-2.99% D-8.00%
1,000 0
V-3.62% D-4.27%
V-3.29% D-4.00%
Healthcar Engg. & Textiles & Shipping Media & & Entertain e & Life Construct Garment
V-6.12% D-5.60%
V-6.69% D-12.00% V-0.24% D-1.07%
V-0.64% D-0.80%
IT & ITES
Manufact uring
BFSI
Total Value
1,245
1,605
4,171
482
1,583
356
584
531
989
103
Total deals
88
52
56
30
28
9
16
15
21
3
Energy
Hotels & Telecom Resorts
Retail
Others
3,382
39
1,081
8
4
45
100 90 80 70 60 50 40 30 20 10 0
IT & ITES retained the top position in terms of number of deals. BFSI was the top contributor in terms of value led by two major investments: Carlye and Citigroup’s USD 760 million investment in HDFC; and a joint investment of USD 345 million by General Atlantic, Goldman Sachs, and SAIF Partners in National Stock Exchange The share by deals for Manufacturing was slightly higher in 2006 as compared to 2007. This may be due to the fact that there was no deal in this sector in Q207. However the sector caught up and witnessed 38 deals in H2 of 2007 Telecom sector’s contribution was low in terms of number of deals but its contribution in terms of value increased significantly from USD 1.3 Bn to USD 3.3 Bn – mainly due to 2 deals of Bharti amounting to USD 3 Bn Source: Venture Intelligence
Page 13
PE Investments in 2006 –Trends in Stages
V-48.7% D-35.8%
USD million
4000 3000
V-21.1% D-21.9%
2000 1000 0
V-3.2% D-19.5%
V-15.2% D-4.6%
V-6.8% D-15.2%
V-5% D-3%
Early
Grow th
Late Stage
PIPE
Buyout
Other
Value
241
511
3,639
1,576
1,135
373
Deals
59
46
108
66
14
9
120 100 80 60 40 20 0
Deals
Percentage Contribution of Sectors to number of deals and Value of deals
Late Stage deals remained popular with investors. They made the highest contribution to the number of deals and also value of deals. The share of Buyouts was low in number of deals but their contribution to the value of deals was significant; led especially by KKR’s buyout of Flextronics Software Systems for USD 765 million. There were 59 Early stage deals in 2006 thus contributing significantly to the number of deals, but their contribution to value of deals was a mere 3%. Source: Venture Intelligence
Page 14
PE Investments in 2007 – Trends in Stages Percentage Contribution of Sectors to number of deals and Value of deals 7,000 6,000
V-32.35% D-36.80%
V-39.98% D-21.87%
160 140 120
5,000
100
4,000
2,000
V-2.61% D-20.27%
1,000 0 Value Deal
80
V-9.87% D-12.00%
3,000
V-4.31% D-2.67%
V-2.30% D-3.47%
V-8.58% D-2.93%
PIPE
Growth
Early
Buyout
Pre-IPO
Other/Unknown
5,224
6,458
1,595
421
696
372
1,386
138
82
45
76
10
13
11
Late Stage deals continued to attract investments throughout 2007 and were the highest contributor to the number of deals. PIPE deals contributed highest to the total value of deals led by major investment of $2 bn by Temasek in Bharti Airtel The share of buyouts decreased from 2006—more substantially in terms of value as there were not many big ticket deals in this space. The biggest buyout was Blackstone picking 70% stake in apparel exporter Gokaldas Exports, a major player in ready made garment industry for $165m Early stage deals contributed substantially to the number of deals, but their contribution to the total value of deals remained low. The trend of venture capital is yet to develop, as most of the money is chasing big deals
Page 15
40 20
Late Stage
Source : Venture Intelligence
60
0
Buyout Deals in India Company
PE / VC FIRM
Industry
2005 & before
Deal Value ( USD mn )
VA Tech WABAG India
ICICI Ventures
Engg. & Construction
WNS
Warburg Pincus
ITES
Associated Cement Companies – Refractories Division
ICICI Ventures
Manufacturing
Punjab Tractors
Actis
Auto
N/A
Infomedia
ICICI Ventures
Media
N/A
Thomas Cook India
Dubai Investment Group
Travel
127
Sify
Infinity Capital
IT&ITES
2006
23 N/A 60
63 ( USD mn )
Flextronics Software Systems
KKR
IT Services
Nilgiri Dairy Farm
Actis
Supermarkets
65
GPI Textiles
Avenue Capital
Textiles
44
OCM India
WL Ross
Textiles
37
Oriental Containers
Navis Capital
Packaging
37
Patel Roadways
Reliance Capital
Surface Transport
33
Nirula’s
Navis Capital
Fast Foods
20
Source : Venture Intelligence
Page 16
765
Buyout Deals in India (Cont’d.) Company
PE / VC FIRM
Industry
Deal Value ( USD mn )
2007 Intelenet Global Services
Blackstone
ITES
200
Gokaldas Exports
Blackstone
Textile & Garments
165
Sharekhan
Citigroup
Financial Services
Aster Infrastructure
New Silk Route
Telecom Infrastructure
Apollo Hospitals Enterprise Ltd.Western Hospital Corp.
One Equity Partners LLC.
Medical
JRG Securities Ltd.
Baring Private Equity Partners India Pvt. Ltd.
Financial services
41
Phoenix Lamps
Actis
Auto Components
24
Tebma Shipyard
ICICI Ventures
Shipyard
23
Airworks India
Global Technology Investments
Aircraft Maintenance
24
Source : Venture Intelligence, AVCJ
Page 17
118.2 57 81.4
Buyout Deals – Trends 1,135
USD million
1200
14 Deals
900
14 Deals
600 300 0
977
375 9 Deals 6 Deals
2005
2006
2007
Amount of Buyout deals
In the year 2007, nine buyout deals have accounted for an amount of USD 977 million The share of buy outs in number of deals and in terms of value has remained low as compared to 2006 However, there were 3 buyouts that involved transactions worth over $100 Mn in 2007 compared to just one mega buyout in last year Blackstone was involved in 2 mega buyouts while Citi’s CVC unit made 1 buyout deal of retail broking arm of Sharekhan
Source : Venture Intelligence, AVCJ
Page 18
No. of Deals – USD 25 & USD 50 million plus investments No. of Deals with Investments Above $ 25 Mn PE Firm
2006
2007
No. Of Deals with Investments Above $50 Mn 2006
2007
3i
4
4
-
4
Avenue Capital Group
-
3
-
2
Baring Private Equity
-
2
-
Blackstone
-
8
-
6
ChrysCapital
-
2
2
1
Citigroup
-
15
-
9
General Atlantic
2
3
-
3
ICICI Ventures
3
7
2
2
IL&FS
-
7
-
3
JP Morgan
-
2
2
2
Morgan Stanley
2
3
2
2
SCB PE
2
2
-
1
Spinnaker
2
1
-
Temasek
-
5
-
3
Warburg
4
3
-
2
Source : AVCJ
Page 19
-
-
No. of Deals – USD 100 million plus investments No. of Deals with Investments Above $100 Mn PE Firm
2006
2007
Apax Partners
-
1
Avenue Capital Group
-
2
Blackstone
-
5
Carlyle
-
1
Citigroup
-
5
Farallon
1
Goldman Sachs
-
JP Morgan
1
-
KKR
1
-
Lehman
-
2
Morgan Stanley
-
2
Providence Partners
1
Temasek
1
Source : AVCJ
Page 20
-
4
-
2
2006 – Some USD 75 million plus investments Company
PE / VC FIRM
Industry
Deal Value ( USD million )
Idea Cellular
Providence Equity, Citigroup, ChrysCapital, NSS Ventures, Sequoia Capital, Spinnaker, Macquarie Bank, 2i Capital
Mobile Services
Flextronics Software Systems
KKR, Sequoia
IT Services
765 (for 85%)
Tata Teleservices
Temasek
Telecom Services
360 (for 9.9%)
L&T-Infrastructure Development Projects
JP Morgan Chase, IDFC PE-led consortium
Infrastructure
Indiabulls Financial Services
Farallon Capital Management
Financial Services
143
Quatrro BPO Solutions
Olympus Capital
BPO
100
Indiabulls Infrastructure
Karrick , Farallon Capital
Infrastructure Finance
Centurion Bank
Bank Muscat , ICICI Ventures
Banking
91
Amtek India
New Vernon , DE Shaw , IREO , Oasis Capital, Ritchie Capital , Kingdon Capital , Minivet Capital
Auto Components
82
UTI Bank
ChrysCapital
Banking
80
Nilgiri Dairy Farm
Actis
Supermarkets
Source : Venture Intelligence, AVCJ
Page 21
966 (for 34.5 %)
124 (for 21.6%)
99.3 (for 13.3%)
65.2 (for 51%)
2007 – Some USD 100 million plus investments Company
PE / VC FIRM
Industry
Deal Value ( USD million )
Bharti Airtel Ltd.
Temasek Holdings Advisors India Pvt. Ltd.
Telecommunications
2,013 (5% stake)
Bharti Infratel Ltd.
Temasek Holdings Advisor, CVC International India, Goldman Sachs Asia Ltd.
Telecommunications
1.000 (10% stake)
Jaypee Infratech
ICICI Venture Funds Management Company Ltd.
Construction
Housing Development Finance Corporation (HDFC)
Carlyle Group and Citigroup
Banking and Financial Services
ICICI Bank Ltd.
Dubai International Capital
Financial services
598 (2.9%)
National Stock Exchange (NSE)
General Atlantic Partners, SAIF Partners, Goldman Sachs, Morgan Stanley, Citigroup, Actis
Financial Services
525 (21%)
SKIL Infrastructure
Avenue Capital
Infrastructure
Reliance Telecom Infrastructure Ltd.
DA Capital; Fortress Capital; Galleon Partners; GLG Partners LP; HSBC Principal Investments; New Silk Route Advisors Ltd.; Soros Fund Management LLC
Telecommunications
Ushodaya Enterprises Ltd.
Blackstone Advisors India Pvt. Ltd.
Media
IDFC
Khazanah Nasional
Financial Services
Source : Venture Intelligence, AVCJ
Page 22
815 760 (7.1% stake)
500 (26% stake)
346 (5% stake)
275 (26% stake) 188
Large PE Exits – 2006 Company
PE / VC FIRM
Acquirer
Industry Healthcare & Lifesciences
Deal Value (USD million)
Matrix laboratories
Temasek Holdings, Newbridge Capital, Spandana Foundation
Mylan Laboratories
Mphasis
Baring PE
EDS
IT & ITES
380 ( for 52% )
Office Tiger
Francisco Partners
RR Donnelley
IT & ITES
250
Celetronix Intrenational
Westbridge, Baring PE , NEA, Golden Gate Capital, Charterhouse Group Intnl, Alta Partners
Jabil Circuit
IT & ITES
185
Progeon
Citigroup
Infosys Technologies
IT & ITES
115
736 ( for 71.5 % )
These big ticket deals clearly indicate a trend in the deal valuations in India… Source : Venture Intelligence, AVCJ
Page 23
Large PE Exits – 2007 Company
PE / VC FIRM
Acquirer
Industry
Deal Value (USD million)
Sintex Industries Ltd.
Warburg Pincus India Pvt. Ltd.
Undisclosed Investor(s) (India)
Manufacturing Heavy
256.4 (for 25%)
Punjab Tractors Ltd.
Actis Capital LLP.
Mahindra & Mahindra Ltd.
Transportation/ Distribution
215 ( for 43.5 % )
ACE Refractories Ltd
ICICI Venture Funds Management Company Ltd. (India)
Calderys (France)
Manufacturing Heavy
136 (for 99%)
Deccan Aviation Ltd.
Deccan Aviation Ltd. (India); ICICI Venture Funds Management Company Ltd. (India)
Kingfisher Radio Ltd. Transportation/ (India); United Distribution Breweries Group (UB Group) (India)
MTR Foods Ltd.
JP Morgan Partners Advisers Pte Ltd., MTR Foods Ltd., Aquarius Investment Advisors (India) Pvt. Ltd.
Orkla ASA
Firstsource Solutions Ltd.
ICICI Venture Funds Management Company Ltd.
Metavante Corporation, Galleon Partners
Godrej Beverages and Foods IL&FS Investment Managers Ltd. Ltd. YES Bank Ltd.
ChrysCapital Management Co., Citigroup Venture Capital International
104.6 (for 20%)
Consumer products/services Services - NonFinancial
100
73 (for 20%)
The Hershey Company
Consumer products/services
53.9 (for 51%)
Khazanah Nasional Bhd.
Financial services
48.5 (for 5%)
These big ticket deals clearly indicate a trend in the deal valuations in India… Source : Venture Intelligence, AVCJ
Page 24
PE Exits – Trends
1
2 PE funds obtained exit in 37 companies during 2006 including 19 IPO’s In comparison, year 2005 witnessed 41 liquidity events including 17 via IPO’s PE and VC firms obtained exit routes in 55 companies 2007
Source : Venture Intelligence
Page 25
3 PE backed companies raised about USD 1.2 billion via IPO’s in 2007
Total value of M&A transactions providing exits to PE investors during 2007 was approx USD 1.7 billion
India–Europe M&A Activity
Scenario of M&A activity between India and Europe Total number of M&A deals (inbound and outbound) have grown by 88% during 2005-2007
188
Total value of M&A deals has grown nearly six times during 2005-2007
30
In the period 2005-2008 (till 28 April) there have been 247 outbound deals for the value of USD 27.8 billion, lead by some big deals like the USD 12.7 billion TataCorus deal
The number of inbound deals became nearly double during 2005-2007, and their value increased by nearly seven times, indicating increasing attractiveness of Indian companies However Indian companies are very keen on pursuing cross-border deals also. The outbound deal activity grew by 80% in terms of number of deals and by nearly six times in value. According to a report, companies in India see international M&A as one of the means of progressing up the value chain through the acquisition of brands and distribution channels in North America and Europe
30
*2
160 140
131 19.1 *
20
120
1
100
100 15
80 59
10
5
2.3
20 0
0 2005
2006 value
*1-value
60 40
5.2
*2-value
Page 27
180
25
USD billion
Number of inbound deals during 2005 –2008 have been 231 for the value of USD 30.3 billion – lead by another big deal —acquisition of Indian telecom major Hutch by Vodafone
200
35
includes Tata-Corus deal includes Hutch-Vodafone deal
2007 deals
2008
India–Europe Outbound M&A scenario Outbound M&A deals 18
100 95
16.1
16
80 70
12 66 10
60
54
8.3
50
8
40
6 4
32
30 20
2.7
2
0.6
0
10 0
2005
2006 Value
2007 No.of deals
Source: Bloomberg, accessed 28 April 2008 Note: 1) YTD figures are till 23 April 2) All pending and completed deals
Page 28
90
14
USD billion
Total number and value of outbound M&A deals from 2005 to 2008 (till 28 April) from India to Europe were 247. and USD 27.8 billion respectively Value of deals increased by nearly three times during 2005-2007 Prominent deals during the period were Tata’s USD 12.7 billion acquisition of steel major Corus and United Breweries’ acquisition of Whyte & Mackay for USD 1.1 billion in 2007 Majority of deals (88%) were in the Western Europe region Deals in Eastern Europe were primarily in Czech Republic and Russia
2008
Top 5 Outbound deals from 2005-2008 (YTD) Year
Target Name
Acquirer Name
Target Country
Sector
Amount (USD million)
2007
Corus Group
Tata Steel
Britain
Steel
12,780
2007
Whyte & Mackay
United Spirits
Britain
Wine/Beverages
1,176
2007
Finsider international
Vedanta Resources
Britain
Metals
981
2007
REpower systems
Multiple Acquirers
Germany
Power
975
2007
Sinvest ASA
Aban Offshore
Norway
Power
645
Page 29
India–Europe Inbound M&A scenario 25
120 111
20
73
15
60 10
52 40 32
5 2.7
3.1
2.2
0
20
0 2005
2006 Value of deals
Source: Bloomberg, accessed 28 April 2008 Note: 1) YTD figures are till 23 April 2) All pending and completed deals
Page 30
100
22.1
80 USD billion
Total M&A deals from 2005 to 2008 (28 April) with Indian companies as targets and European companies as acquirers were 268. Value of deals was USD 30.3 billion Value of deals increased by nearly 11 times from 2005 to 2007, but this was particularly lead by the acquisition of Hutchisson Essar by Vodafone for USD 18.5 billion Major deals apart from the Hutch Vodafone deal were the Holcim-Ambuja Cement deal Nearly all deals (97%) were from the Western Europe region Deals in Eastern Europe were primarily from Cyprus, Russia , Poland
2007
2008
No. of deals
Top 5 Inbound deals from 2005-2008 (YTD)
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Year
Target Name
Acquirer Name
Target Country
Sector
Amount (USD million)
2007
Hutchison Essar
Vodafone Group
Britain
Telecom
18,567
2005
Bharti Airtel
Vodafone Group
Britain
Telecom
1,464
2006
Ambuja Cements
Holcim Ltd.
Switzerland
Cement
563
2008
Sweta Estates
Ashmore Group
Britain
Power
550
2007
My Home Industries
CRH Plc
Ireland
Cement
451
India –Italy M&A scenario Inbound In the period 2005-2008 (till 28 April) there were nine inbound deals. Six of the deals were in 2007 itself. The deals were in sectors including Engineering and Construction, Manufacturing, Beverages
Outbound In the period 2005-2008 (till 28 April) there were 12 outbound deals The deals were in sectors including Apparels and Textiles, Pharmaceuticals, and Auto Equipment Italy has a booming fashion industry and India’s fashion industry is also witnessing growth. Indian players want to integrate with the global fashion industry and thus there are significant number of deals in the Apparel/Textile sector
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Top 5 Inbound deals from Italy during 20052008(till28 April) Year
Target Name
Acquirer Name
Sector
Amount (USD million)
2007
Tecnimont ICB
Maire Tecnimont Spa
Engineering & Construction
103.6
2007
Fresh & Honest Café
Lavazza
Beverages
51.2
2007
Barista Coffee
Lavazza
Beverages
49.7
2006
Carraro India
Carraro Spa
Auto Parts &Equipment
25.6
2007
United Shippers
Coeclerici Logistics Spa
Shipping & Logistics
19.7
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Top 5 Outbound deals from Italy during 20052008(till28 April) Year
Target Name
Acquirer Name
Sector
Amount (USD million)
2007
Mariella Burani Fashion Group
Gitanjali Gems
Retail
N.A
2008
Metalcastello Spa
ICICI Ventures and Mahindra and Mahindra
Auto Equipment
N.A
2007
Top Glass Spa
Kemrock Industries & Export
Commercial Services
N.A
2006
G R Grafica Ricerca Design s
Mahindra & Mahindra
Auto Manufacturers
N.A
2007
Cemp Spa
Multiple Acquirers
Auto Parts &Equipment
40
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Thank you